Paterson v Lepionka & Company Investments Limited

[2020] NZHC 3243

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2019-441-000078

[2020] NZHC 3243

BETWEEN

GARTH BOWKETT PATERSON as trustee of the Garth Paterson Family Trust

Plaintiff

AND

LEPIONKA & COMPANY INVESTMENTS LIMITED

First Defendant

AND

STEFAN JOZEF JOHN LEPIONKA, JOE DUNCAN and GREGORY BERNARD

HORTON as trustees of the Lepionka Business Trust

Second Defendants

AND

LEPIONKA AND COMPANY LIMITED

Third Defendant

AND

STEFAN JOZEF JOHN LEPIONKA and

NIGEL WARREN HUGHES as trustees of the SJ Lepionka Family Trust

Fourth Defendants

AND

STEFAN JOZEF JOHN LEPIONKA

Fifth Defendant

CIV-2020-441-000041

BETWEEN

GARTH BOWKETT PATERSON
Plaintiff

AND

LEPIONKA & COMPANY INVESTMENTS LIMITED

First Defendant

AND

STEFAN JOZEF JOHN LEPIONKA

Second Defendant

PATERSON v LEPIONKA & CO INVESTMENTS LTD [2020] NZHC 3243 [8 December 2020]

On the Papers

Counsel:

Plaintiff self-represented

M G Colson and S J Leslie for the Defendants

Judgment:

8 December 2020

JUDGMENT OF DOOGUE J

(Costs)

[1]    In December 2017, following a three-week trial in July-August 2017, Fitzgerald J issued a lengthy decision on the substantive proceedings between the parties in AFI Management Pty Ltd v Lepionka & Co Investments Ltd (the main judgment), relating to a dispute about a property development in the Tukituki Valley (the property).1 The rights and liabilities of the parties were fully and finally determined by settlements following the main judgment, and Mr Paterson and the entities related to him abandoned an appeal.

[2]    In the proceedings before me, there were two substantive applications from Mr Paterson relating to the main judgment:

(a)In proceeding CIV-2019-441-000078 (the mortgagee  proceeding),  Mr Paterson as trustee of the Garth Paterson Family Trust (Paterson Family Trust) pleaded eight causes of action for breaches of duties owed to him under statute, common law and equity relating to the sale of the property by the first defendant Lepionka & Co Investments Ltd (LCIL) as mortgagee.

(b)In proceeding CIV-2020-441-000041 (the bankruptcy proceeding), Mr Paterson in his personal capacity pleaded three causes of action:

(i)malicious prosecution of bankruptcy proceedings by LCIL against Mr Paterson;

1      AFI Management Pty Ltd v Lepionka & Co Investments Ltd [2017] NZHC 3116.

(ii)abuse of process; and

(iii)dishonest assistance.

[3]    On 26 August 2020, I issued my judgment.2 I concluded it was appropriate to strike out the mortgagee proceeding as it was barred by the principles of res judicata and was an abuse of the Court’s process. I concluded it was appropriate to strike out the bankruptcy proceeding on the basis that Mr Paterson’s statement of claim disclosed no reasonably arguable cause of action.

[4]    The  defendant  sought  and  obtained  an  order  under  s  166  of   the   Senior Courts Act 2016 (the Act) restricting Mr Paterson from commencing or continuing civil proceedings in this Court. I made the order because Mr Paterson has consistently displayed a willingness to bring proceedings:

(a)that have no prospect for success;

(b)that expose the defendants to inconvenience, harassment and expense out of all proportion to the gain he is likely to receive;

(c)without regard to the merits, proportionality or costs of the proceeding;

(d)disclosing no reasonable grounds of bringing a claim; and

(e)that are an abuse of the Court’s process.

[5]    Against that background, the defendants now seek costs on a 2B basis with an uplift of 50 per cent as follows:

Costs 2B basis	$29,277.50
50 per cent uplift	$14,638.75
Total costs	$43,916.25
Disbursements	$1,415.65
Total costs and disbursements	$45,331.90

2      Paterson v Lepionka & Co Investments Ltd [2020] NZHC 2184.

[6]    Mr Paterson opposes any costs being awarded to the defendants, repeating various allegations as to the reasonableness of their conduct and their costs claim.

[7]    In Bradbury v Westpac Banking Corp the Court of Appeal described increased costs as warranted where “there is a failure by the paying party to act reasonably” and indemnity costs “where party has behaved either badly or very unreasonably”.3 When considering a decision on costs, the Court may need to analyse the facts to ascertain what has given rise to the litigation and take into account whether the conduct of one of the parties has contributed to costs.4

[8]    For all the reasons expressed in my  judgment  of 26 August 2020,5  I  find  Mr Paterson’s conduct has been unreasonable and was the reason for the existence of these proceedings. A 50 per cent uplift is warranted in those circumstances.

[9]    Costs are awarded against Mr Paterson in the sum of costs $43,916.25 and disbursements of $1,415.65, being a total of $45,331.90.

Doogue J

Solicitors:

Bell Gully, Wellington

3      Bradbury v Westpac Banking Corp [2009] NZCA 234; [2009] 3 NZLR at 400 at [27].

4      Maiden v Body Corporate 46112 [2018] NZHC 1219 at [61].

5      Paterson v Lepionka & Co Investments Ltd, above n 2.